As filed with the Securities and Exchange Commission on December 6, 2017
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
Buckeye Partners, L.P.
(Exact name of registrant as specified in its charter)
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Delaware
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4610
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23-2432497
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(State or other jurisdiction of
incorporation or organization)
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(Primary Standard Industrial
Classification Code Number))
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(IRS Employer
Identification Number)
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One Greenway Plaza
Suite 600
Houston, Texas
77046
(832) 615-8600
(Address, including zip code, and telephone number, including area code, of registrants principal executive offices)
Todd J. Russo
Senior Vice
President, General Counsel and Secretary
One Greenway Plaza
Suite 600 Houston, Texas 77046
(832) 615-8600
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
with a copy
to:
E. Ramey Layne, Esq.
Vinson & Elkins L.L.P.
1001 Fannin Street, Suite 2500
Houston, TX 77002-6760
(713) 758-2222
Approximate
date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the
following box: ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following
box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D.
filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer, accelerated filer, and smaller reporting company in
Rule 12b-2
of the Exchange Act.
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐ (Do not check if a smaller reporting company)
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Smaller reporting company
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☐
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act. ☐
CALCULATION OF REGISTRATION FEE
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Title of each class of
securities to be registered
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Amount
to be
registered
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Proposed
maximum
offering
price
per unit
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Proposed
maximum
aggregate
offering price
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Amount of
registration fee(2)
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Limited partnership units
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(1)
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(1)
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Other classes of units
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(1)
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(1)
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Total
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(1)
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$1,000,000,000
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$124,500
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(1)
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The amount to be registered and the proposed maximum aggregate offering price per unit are not specified as to each class of securities to be registered pursuant to General Instruction II.D of
Form S-3
under the Securities Act of 1933 as amended, or the Securities Act. The aggregate maximum offering price of all securities issued by Buckeye Partners, L.P. pursuant to this Registration Statement shall
not have a maximum aggregate offering price that exceeds $1,000,000,000 in U.S. dollars or the equivalent at the time of offering in any other currency. The amount also includes such indeterminate principal amount, liquidation amount or number of
identified classes of securities as may be issued upon conversion or exchange of other classes of units representing limited partner interests that provide for conversion or exchange into other securities. No separate consideration will be received
for securities that are issued upon exchange or conversion of other classes of securities.
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(2)
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Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act 1933.
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The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. This prospectus is
not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale of these securities is not permitted. The selling unitholders may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective.
Subject to Completion, dated December 6, 2017
PROSPECTUS
$1,000,000,000
Buckeye Partners, L.P.
Limited Partnership Units
Other Classes of Units
We
may from time to time, in one or more offerings, offer and sell limited partnership units (LP Units) representing limited partner interests in us, as well as other classes of units representing limited partner interests, the specific
designations and rights (including conversion, voting and other rights) and the qualifications, limitations or restrictions of which will be determined at the approximate time of their offering. The aggregate offering price of the LP Units or other
classes of units sold by us under this prospectus will not exceed $1.0 billion.
You should read this prospectus and the applicable
prospectus supplement and the documents incorporated by reference herein and therein carefully before you invest in our securities. This prospectus may not be used to consummate sales of securities unless accompanied by a prospectus supplement.
Our LP Units are traded on the New York Stock Exchange under the symbol BPL. The last reported sale price of our LP Units on
December 4, 2017 was $47.40 per LP Unit.
Investing in
our securities involves a high degree of risk. Limited partnerships are inherently different from corporations. You should carefully consider each of the factors referred to under
Risk Factors
on
page 4 of this prospectus, contained in the applicable prospectus supplement and in the documents incorporated by reference herein and therein before you make an investment in our securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
THE DATE OF THIS
PROSPECTUS IS , 2017
TABLE OF CONTENTS
In making your investment decision, you should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with any other information. If anyone provides you with different or inconsistent information, you should not rely on it.
You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front cover
of this prospectus. You should not assume that the information contained in the documents incorporated by reference in this prospectus is accurate as of any date other than the respective dates of those documents. Our business, financial condition,
results of operations and prospects may have changed since those dates.
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we have filed with the Securities and Exchange Commission (the SEC) using
a shelf registration process. Under this shelf registration process, we may sell the securities described in this prospectus in one or more offerings. This prospectus provides you with a general description of the securities we may
offer. Each time we sell securities with this prospectus, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add to, update or change information in
this prospectus. If there is any inconsistency between the information in this prospectus and any prospectus supplement, you should rely on the information in that prospectus supplement. As used in this prospectus, the Partnership,
we, our, us, or like terms mean Buckeye Partners, L.P. References to Buckeye GP, the general partner, or our general partner refer to Buckeye GP LLC, the general partner of the
Partnership.
The information in this prospectus is accurate as of its date. Therefore, before you invest in our securities, you should
carefully read this prospectus and any prospectus supplement relating to the securities offered to you together with the additional information described under the heading Where You Can Find More Information.
BUCKEYE PARTNERS, L.P.
We are a publicly traded master limited partnership that owns and operates, or owns a significant interest in, a diversified global network of
integrated assets providing midstream logistic solutions, primarily consisting of the transportation, storage, processing and marketing of liquid petroleum products. We are one of the largest independent liquid petroleum products pipeline operators
in the United States in terms of volumes delivered, with approximately 6,000 miles of pipeline. We also use our service expertise to operate and/or maintain third-party pipelines and perform certain engineering and construction services for our
customers. Our global terminal network, including through our interest in VTTI B.V. (VTTI), comprises more than 135 liquid petroleum products terminals with aggregate storage capacity of over 173 million barrels across our portfolio
of pipelines, inland terminals and marine terminals located primarily in the East Coast, Midwest and Gulf Coast regions of the United States as well as in the Caribbean, Northwest Europe, the Middle East and Southeast Asia. Our global network of
marine terminals enables us to facilitate global flows of crude oil and refined petroleum products, offering our customers connectivity between supply areas and market centers through some of the worlds most important bulk liquid storage and
blending hubs. Our flagship marine terminal in The Bahamas, Buckeye Bahamas Hub Limited, is one of the largest marine crude oil and refined petroleum products storage facilities in the world and provides an array of logistics and blending services
for the global flow of petroleum products. Our Gulf Coast regional hub, Buckeye Texas Partners LLC, offers world-class marine terminalling, storage and processing capabilities. Through our 50% equity interest in VTTI, our global terminal network
offers premier storage and marine terminalling services for petroleum product logistics in key international energy hubs. We are also a wholesale distributor of refined petroleum products in certain areas served by our pipelines and terminals.
Our executive offices are located at One Greenway Plaza, Suite 600, Houston, Texas 77046. Our telephone number is
(832) 615-8600.
We make our periodic reports and other information filed with or furnished to the SEC available, free of charge, through our website as soon as reasonably practicable. Information on our website
or any other website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus unless specifically so designated and filed with the SEC.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information with the SEC. You may read and copy any document we file at the
SECs Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-732-0330
for further information on their public reference room. Our SEC filings are also available at the SECs website at
http://www.sec.gov
. You can also obtain information about us at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005, or on our website at
http://www.buckeye.com
. Information on our website or any other website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus unless
specifically so designated and filed with the SEC.
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INFORMATION WE INCORPORATE BY REFERENCE
The SEC allows us to incorporate by reference the information we have filed with the SEC. This means that we can disclose
important information to you without actually including the specific information in this prospectus by referring you to those documents. The information incorporated by reference is an important part of this prospectus. Information that we file
later with the SEC will automatically update and may replace information in this prospectus and information previously filed with the SEC.
We incorporate by reference the documents listed below and any future filings we make with the SEC under Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, or the Exchange Act, including all such documents we may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the registration statement, until all
offerings under this registration statement are completed (excluding any information furnished under Items 2.02 or 7.01 on any current report on
Form 8-K).
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Annual Report on
Form 10-K
for the year ended December 31, 2016, filed on February 24, 2017;
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Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2017, filed on May 5, 2017; Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2017, filed on August 8, 2017; and Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2017, filed on November 3, 2017;
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Current Reports on
Form 8-K,
filed on January 4, 2017, June 9, 2017, June 26, 2017, November 13, 2017 and November 20, 2017 and our Current Report on
Form 8-K/A
filed on June 19, 2017; and
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The description of our limited partnership units contained in the Registration Statement on
Form 8-A
filed on August 9, 2005.
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You may request a copy of any document incorporated by reference in this prospectus, at no cost, by writing or calling us at the following
address:
Buckeye Partners, L.P.
One Greenway Plaza
Suite 600
Houston, Texas 77046
(832)
615-8600
You should rely only on the information contained in or incorporated by reference in this prospectus or any prospectus
supplement. We have not authorized anyone else to provide you with any information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information incorporated by reference or
provided in this prospectus or any prospectus supplement is accurate as of any date other than its respective date.
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RISK FACTORS
An investment in our securities involves a significant degree of risk. Before you invest in our securities you should carefully consider those
risks discussed in the Forward-Looking Statements section of this prospectus, the risk factors included in our most recent Annual Report on
Form 10-K
and as supplemented by our Quarterly
Reports on
Form 10-Q,
each of which is incorporated herein by reference, and those risk factors that may be included in any applicable prospectus supplement, together with all of the other information
included in this prospectus, any prospectus supplement and the documents we incorporate by reference in evaluating an investment in our securities.
If any of the risks discussed in the foregoing documents were to occur, our business, financial condition, results of operations and cash flow
could be materially adversely affected. In that case, we may be unable to pay distributions to our unitholders. In that event, the trading price of our securities could decline and you could lose all or part of your investment.
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FORWARD-LOOKING STATEMENTS
Statements included or incorporated by reference in this prospectus contain various forward-looking statements and information that are based
on our beliefs, as well as assumptions made by us and information currently available to us. When used in this document, words such as proposed, anticipate, project, potential, could,
should, continue, estimate, expect, may, believe, will, plan, seek, outlook and similar expressions and statements regarding our
plans and objectives for future operations are intended to identify forward-looking statements. Although we believe that such expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that such
expectations will prove to be correct. Such statements are subject to a variety of risks, uncertainties and assumptions as described in more detail in Item 1A. Risk Factors included in our Annual Report on
Form 10-K
for the year ended December 31, 2016 and under Risk Factors in this prospectus. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove
incorrect, our actual results may vary materially from those anticipated, estimated, projected or expected. Although the expectations in the forward-looking statements are based on our current beliefs and expectations, caution should be taken not to
place undue reliance on any such forward-looking statements because such statements speak only as of the date hereof. Except as required by federal and state securities laws, we undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future events or any other reason.
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USE OF PROCEEDS
Except as otherwise provided in the applicable prospectus supplement, we will use the net proceeds we receive from the sale of the securities
covered by this prospectus for general partnership purposes, including repayment of debt, acquisitions and capital expenditures and additions to working capital.
The actual application of proceeds we receive from the sale of any particular offering of securities using this prospectus will be described
in the applicable prospectus supplement relating to such offering.
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DESCRIPTION OF THE LIMITED PARTNERSHIP UNITS
General
The LP Units represent limited
partner interests in us. The holders of LP Units are entitled to receive distributions, if made, in accordance with our amended and restated partnership agreement and exercise the rights or privileges available to limited partners thereunder. For a
description of the rights and privileges of holders of LP Units in and to partnership distributions, please read How We Make Cash Distributions. For a description of the rights and privileges of limited partners under our amended and
restated partnership agreement, including voting rights, please read Our Amended and Restated Partnership Agreement.
Voting
Each holder of LP Units is entitled to one vote for each LP Unit held by such holder on all matters submitted to a vote of the unitholders.
Certain events, as more fully described in our amended and restated partnership agreement, require the approval of the limited partners holding in the aggregate at least two-thirds of the outstanding LP Units. Other events, as more fully described
in our amended and restated partnership agreement, require the approval of the limited partners holding in the aggregate at least 80% of the outstanding LP Units. Please read Our Amended and Restated Partnership AgreementVoting.
No Preemptive Rights
The holders of
LP Units are not entitled to preemptive rights in respect of issuances of securities by us.
Transfer Agent and Registrar
The transfer agent and registrar for the LP Units is American Stock Transfer & Trust Company, LLC. You may contact them at the
following address: 6201 15th Avenue, Brooklyn, NY 11219.
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DESCRIPTION OF OTHER CLASSES OF UNITS
Our partnership agreement authorizes us to issue an unlimited number of additional limited partner interests and other equity securities for
the consideration and with the rights, preferences, and privileges established by our general partner without the approval of any of our limited partners. However, without the prior approval of the holders of two-thirds of the outstanding LP Units,
our general partner is prohibited from causing us to issue any class or series of limited partner interests having preferences or other special or senior rights over the previously outstanding LP Units. As of December 4, 2017, no classes of limited
partner interests were outstanding other than the LP Units.
Should we offer other classes of units under this prospectus, a prospectus
supplement relating to the particular class or series of units offered will include the specific terms of those units, including, among other things, the following:
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the designation, stated value, and liquidation preference of the units and the number of other units offered;
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the public offering price at which the units will be issued;
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the conversion or exchange provisions of the units;
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any redemption or sinking fund provisions of the units;
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the distribution rights of the units, if any;
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a discussion of any additional material federal income tax considerations (other than as discussed in this prospectus), if any, regarding the units; and
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any additional rights, preferences, privileges, limitations, and restrictions of the units.
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The transfer agent, registrar, and distributions disbursement agent for the units will be designated in the applicable prospectus supplement.
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HOW WE MAKE CASH DISTRIBUTIONS
Set forth below is a summary of the significant provisions of our amended and restated partnership agreement that relate to distributions.
General
Our amended and restated
partnership agreement does not require distributions to be made quarterly or at any other time. Under our amended and restated partnership agreement, our general partner, from time to time and not less than quarterly, is required to review our
accounts to determine whether distributions are appropriate. Our general partner is permitted to make such distributions as it may determine, without being limited to current or accumulated income or gains. Cash distributions may be made from any of
our funds, including, without limitation, revenues, capital contributions or borrowed funds. Our general partner may also distribute other Partnership property, additional LP Units, or other securities of the Partnership or other entities.
Distributions are made concurrently to all applicable record holders on the record date set for purposes of such distributions.
LP Units Eligible for
Distributions
The LP Units generally participate pro rata in our distributions. As of December 4, 2017, there were approximately
146,644,071 LP Units issued and outstanding. We currently have a long-term incentive plan and a unit deferral and incentive plan (together, the LTIP) which provide for the issuance of up to 5,500,000 LP Units, subject to certain
adjustments.
Distributions of Cash upon Liquidation
If we dissolve in accordance with our amended and restated partnership agreement, we will sell or otherwise dispose of our assets in a process
called a liquidation. We will first apply the proceeds of liquidation to the payment of our creditors, including by way of a reserve of cash or other assets of the Partnership for contingent liabilities. We will distribute any remaining proceeds to
our unitholders, in accordance with their capital account balances, as adjusted to reflect any gain or loss upon the sale or other disposition of our assets in liquidation.
If the sale of our assets in liquidation would be impracticable or would cause undue loss, the sale may be deferred for a reasonable amount of
time or the assets (except those necessary to satisfy liabilities) may be distributed to our limited partners in lieu of cash in the same manner as cash or proceeds of a sale would have been distributed.
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THE PARTNERSHIP AGREEMENT
The following is a summary of the material provisions of our amended and restated partnership agreement.
The following provisions of our amended and restated partnership agreement are summarized elsewhere in this prospectus.
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with regard to distributions, please read How We Make Distributions;
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with regard to allocations of taxable income and taxable loss, please read Material U.S. Federal Income Tax Consequences.
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Organization and Duration
The
Partnership was organized on July 11, 1986 and has a term extending until the close of business on December 31, 2086.
Purpose
The purpose of the Partnership under our amended and restated partnership agreement is to engage in any lawful activity for which limited
partnerships may be organized under the Delaware Revised Uniform Limited Partnership Act (DRULPA).
Our general partner is
authorized to perform all acts deemed necessary to carry out our purposes and to conduct our business.
Power of Attorney
Each of our limited partners grants to our general partner and, if appointed, a liquidator, a power of attorney to, among other things, execute
and file documents required for our qualification, continuance or dissolution.
Issuance of Additional Securities
Our amended and restated partnership agreement authorizes our general partner to cause us to issue an unlimited number of additional limited
partner interests and other equity securities for the consideration and on the terms and conditions established by our general partner without the approval of any limited partners. Without the prior approval of the holders of two-thirds of the
outstanding LP Units, our general partner is prohibited from causing us to issue any class or series of limited partner interests having preferences or other special or senior rights over the previously outstanding LP Units. Without the approval of
a majority of the holders of the outstanding LP Units, our general partner is prohibited from causing us to issue limited partner interests to itself or its affiliates unless the limited partner interests are of a class previously listed or admitted
to trading on a national securities exchange and property is contributed to us with a value at least equal to the fair market value of the issued limited partner interests.
It is possible that we will fund acquisitions, and other capital requirements, through the issuance of additional limited partner interests,
including LP Units or other equity securities. Holders of any additional LP Units that we issue will be entitled to share with then-existing holders of LP Units in our distributions of available cash. In addition, the issuance of additional
partnership interests may dilute (i) the percentage interests of then-existing holders of LP Units in our net assets and (ii) the voting rights of then-existing holders of LP Units under our amended and restated partnership agreement.
The holders of LP Units do not have preemptive rights to acquire additional LP Units or other partnership interests.
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Limited Liability
Assuming that a limited partner does not participate in the control of our business within the meaning of the DRULPA and that it otherwise acts
in conformity with the provisions of our amended and restated partnership agreement, the partners liability under the DRULPA will be limited, subject to possible exceptions, to the amount of capital the partner is obligated to contribute to
the Partnership for the partners LP Units plus the partners share of any undistributed profits and assets and any funds wrongfully distributed to it, as described below. If it were determined, however, that the right, or exercise of the
right, by our limited partners as a group:
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to elect members of the board of directors of our general partner;
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to remove or replace our general partner;
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to approve certain amendments to our amended and restated partnership agreement; or
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to take any other action under our amended and restated partnership agreement
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constituted participation
in the control of our business for the purposes of the DRULPA, then the limited partners could be held personally liable for our obligations under the laws of Delaware, to the same extent as our general partner. This liability would extend to
persons who transact business with us who reasonably believe that a limited partner is a general partner based on the limited partners conduct. Neither our amended and restated partnership agreement nor the DRULPA specifically provides for
legal recourse against our general partner if a limited partner were to lose limited liability through any fault of our general partner. Although this does not mean that a limited partner could not seek legal recourse, we know of no precedent for
this type of a claim in Delaware case law.
Under the DRULPA, a limited partnership may not make a distribution to a partner if, after the
distribution, all liabilities of the limited partnership, other than liabilities to partners on account of their partnership interests and liabilities for which the recourse of creditors is limited to specific property of the limited partnership,
would exceed the fair value of the assets of the limited partnership. For the purpose of determining the fair value of the assets of a limited partnership, the DRULPA provides that the fair value of property subject to liability for which recourse
of creditors is limited will be included in the assets of the limited partnership only to the extent that the fair value of that property exceeds the nonrecourse liability. The DRULPA provides that a limited partner who receives a distribution and
knew at the time of the distribution that the distribution was in violation of the DRULPA will be liable to the limited partnership for the amount of the distribution for three years from the date of distribution. Under the DRULPA, an assignee who
becomes a substituted limited partner of a limited partnership is liable for the obligations of its assignor to make contributions to the limited partnership, excluding any obligations of the assignor with respect to wrongful distributions, as
described above, except the assignee is not obligated for liabilities unknown to it at the time it became a limited partner and that could not be ascertained from the partnership agreement.
Our subsidiaries conduct business in multiple jurisdictions. Maintenance of our limited liability as a limited partner or member of our
subsidiaries formed as limited partnerships or limited liability companies may require compliance with legal requirements in the jurisdictions in which such subsidiaries conduct business, including qualifying our subsidiaries to do business there.
Limitations on the liability of a limited partner or member for the obligations of a limited partnership or limited liability company have not been clearly established in many jurisdictions. If it were determined that we were, by virtue of our
limited partner interest or limited liability company interest in our subsidiaries or otherwise, conducting business in any state without compliance with the applicable limited partnership or limited liability company statute, or that the right or
exercise of the right by the limited partners as a group to elect members of the board of directors of our general partner, to remove or replace our general partner, to approve certain amendments to our amended and restated partnership agreement, or
to take other action under our amended and restated partnership agreement constituted participation in the control of our business for purposes of the statutes of any relevant jurisdiction, then the limited partners could be held
personally liable for our obligations under the law of that jurisdiction to the same extent as our general partner
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under the circumstances. We will operate in a manner that our general partner considers reasonable and necessary or appropriate to preserve the limited liability of the limited partners.
Voting Rights
The following matters
require the vote of our unitholders as specified below.
Election of the board of directors of our general partner
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All directors on the board of directors of our general partner will be elected by a plurality of the votes cast at meetings of the limited partners. Please read Meetings; Voting. general partner
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Amendment of the amended and restated partnership agreement
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Certain amendments may be made by our general partner without the approval of our unitholders. Certain other amendments require the approval of holders of a majority of outstanding LP Units. Certain other amendments require the approval of
holders of a super-majority of outstanding LP Units. Please read Amendment of Our Amended and Restated Partnership Agreement.
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Sale of all or substantially all of the Partnerships assets
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Holders of two-thirds of outstanding LP Units. Please read Merger, Sale or Other Disposition of Assets.
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Dissolution of the Partnership
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Holders of two-thirds of outstanding LP Units. Please read Termination and Dissolution.
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Removal/Replacement of our general partner
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Holders of 80% of outstanding LP Units. Please read Withdrawal or Removal of Our General Partner.
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Amendment of Our
Amended and Restated Partnership Agreement
General.
Amendments to our amended and restated partnership agreement may be
proposed only by our general partner. To adopt a proposed amendment, other than certain amendments discussed below, our general partner must seek written approval of the holders of the number of units required to approve the amendment or call a
meeting of the limited partners to consider and vote upon the proposed amendment. Except as otherwise described below, an amendment must be approved by the limited partners holding in the aggregate at least a majority of the outstanding LP Units,
referred to as a Majority Interest. No amendments to certain provisions and definitions in our amended and restated partnership agreement relating to or requiring special approval or the approval of a majority of the members
of the audit committee of the board of directors of our general partner may be made without first obtaining such special approval.
No
Unitholder Approval.
Our general partner may generally make amendments to our amended and restated partnership agreement without the approval of any limited partner or assignee to reflect:
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a change in our name, the location of our principal place of business, our registered agent or our registered office;
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a change that our general partner deems appropriate or necessary for us to qualify or to continue our qualification as a limited partnership or a partnership in which the limited partners have limited liability under
the laws of any state or jurisdiction or to ensure that neither we nor any of our operating partnerships will be treated as an association taxable as a corporation for federal income tax purposes;
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a change that is appropriate or necessary, in the opinion of our counsel, to prevent us, Buckeye GP Holdings L.P. (Holdings), our general partner or any of our subsidiaries from in any manner being subjected
to the provisions of the Investment Company Act of 1940, the Investment Advisors Act of 1940, or plan asset regulations adopted under the Employee Retirement Income Security Act of 1974, whether or not substantially similar to plan asset
regulations currently applied or proposed; or
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any other changes or events similar to any of the matters described in the clauses above.
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In
addition, our general partner may make amendments to our amended and restated partnership agreement without the approval of any limited partner or assignee if those amendments, in the discretion of our general partner, reflect:
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a change that in the good faith opinion of our general partner does not adversely affect our limited partners in any material respect;
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a change to divide our outstanding units into a greater number of units, to combine the outstanding units into a smaller number of units or to reclassify our units in a manner that in the good faith opinion of our
general partner does not adversely affect any class of our limited partners in any material respect;
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a change that our general partner deems appropriate or necessary to satisfy any requirements, conditions or guidelines contained in any order, rule or regulation of any federal or state agency or contained in any
federal or state statute; or
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a change that our general partner deems appropriate or necessary to facilitate the trading of any of the LP Units or comply with any rule, regulation, requirement, condition or guideline of any exchange on which any
units are or will be listed or admitted to trading.
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Opinion of Counsel and Partnership Unitholder Approval.
No
amendments to our amended and restated partnership agreement will become effective without the approval of holders of at least 80% of the LP Units unless we obtain an opinion of counsel to the effect that the amendment will not result in the loss of
limited liability of any of our limited partners or cause us or any of our operating partnerships to be treated as an association taxable as a corporation for federal income tax purposes.
Any amendment to our amended and restated partnership agreement that reduces the voting percentage required to take any action must be
approved by the affirmative vote of our limited partners constituting not less than the voting requirement sought to be reduced.
Merger, Sale or Other
Disposition of Assets
Our amended and restated partnership agreement generally prohibits our general partner, without the prior
approval of the holders of at least two-thirds of the outstanding LP Units and special approval, from causing us to, among other things, sell, exchange or otherwise dispose of all or substantially all of the consolidated assets owned by us and our
operating partnerships. In addition, our amended and restated partnership agreement generally prohibits our general partner from causing us to merge or consolidate with another entity without special approval. Our general partner may, however,
mortgage, pledge, hypothecate or grant a security interest in all or substantially all of our assets without the approval of the holders of outstanding LP Units and without special approval.
Withdrawal or Removal of Our General Partner
Our general partner may withdraw as general partner of the Partnership by giving 90 days advance written notice, provided such
withdrawal is approved by the vote of the holders of not less than 80% of the outstanding LP Units or we receive an opinion of counsel regarding limited liability and tax matters.
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Upon receiving notice of the withdrawal of our general partner, prior to the effective date of
such withdrawal, the holders of LP Units representing a Majority Interest may select a successor to the withdrawing general partner. If a successor is not elected, we will be dissolved, wound up and liquidated, unless within 90 days of that
withdrawal, all of our partners agree in writing to continue our business and to appoint a successor general partner. Please read Termination and Dissolution below.
Our general partner may not be removed unless that removal is approved by the vote of the holders of not less than 80% of the outstanding LP
Units, we receive an opinion of counsel regarding limited liability and tax matters, the successor general partner or an affiliate thereof agrees to indemnify and hold harmless our general partner and its affiliates from any liability or obligation
arising out of, or causes the general partner and its affiliates to be released from, any and all liabilities and obligations (including loan guarantees) under fringe benefit plans sponsored by the general partner or any of its affiliates in
connection with our business, except as otherwise prohibited by our amended and restated partnership agreement, and all required regulatory approvals for removal of our general partner shall have been obtained. Any removal of our general partner is
also subject to the approval of a successor general partner by the vote of the holders of LP Units representing a Majority Interest and the agreement of the successor general partner or one of its affiliates to indemnify the removed general partner
against, or to cause it to be released from, certain liabilities.
If our general partner withdraws or is removed, we are required to
reimburse the departing general partner for all amounts due the departing general partner.
Transfer of General Partner Interest
Our general partner is prohibited under our amended and restated partnership agreement from transferring its general partner interest.
Termination and Dissolution
We will
continue as a limited partnership until the close of business on December 31, 2086 or until earlier terminated under our amended and restated partnership agreement. We will dissolve upon:
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(1)
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the expiration of our term on December 31, 2086;
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(2)
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the withdrawal of our general partner unless a person becomes a successor general partner prior to or on the effective date of such withdrawal;
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(3)
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the bankruptcy or dissolution of our general partner, or any other event that results in its ceasing to be our general partner other than by reason of a withdrawal or removal; or
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(4)
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the election of our general partner to dissolve us, if approved by the holders of two-thirds of the outstanding LP Units.
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Upon a dissolution under clause (2) or (3) and the failure of all partners to agree in writing to continue our business and to elect
a successor general partner, the holders of LP Units representing a Majority Interest may also elect, within 180 days of such dissolution, to reconstitute the Partnership and continue our business on the same terms and conditions described in our
amended and restated partnership agreement by forming a new limited partnership on terms identical to those in our amended and restated partnership agreement and having as general partner a person approved by the holders of LP Units representing a
Majority Interest subject to our receipt of an opinion of counsel to the effect that:
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(1)
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the action would not result in the loss of limited liability of any limited partner; and
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(2)
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neither the Partnership nor the reconstituted limited partnership would be treated as an association taxable as a corporation for federal income tax purposes.
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Liquidation and Distribution of Proceeds
Upon our dissolution, unless we are reconstituted and continued as a new partnership by the holders of LP Units representing a Majority
Interest, our general partner or, if our general partner has withdrawn, been removed, dissolved or become bankrupt, the liquidator authorized to wind up our affairs will, acting with all of the powers of our general partner that the liquidator deems
appropriate or necessary in its good faith judgment, liquidate our assets and apply and distribute the proceeds of the liquidation as described in How We Make Cash DistributionsDistributions of Cash Upon Liquidation.
Meetings; Voting
For purposes of
determining the holders of LP Units entitled to notice of or to vote at any meeting or to give approvals without a meeting, our general partner may set a record date, which date for purposes of notice of a meeting shall not be less than 10 days
nor more than 60 days before the date of the meeting. If a meeting is adjourned, notice need not be given of the adjourned meeting and a new record date does not need to be set, if the time and place thereof are announced at the meeting at
which the adjournment is taken, unless such adjournment (together with any prior adjournments that did not have a new record date set) is for more than 60 days. The Partnership may transact any business at the adjourned meeting that might have
been transacted at the original meeting.
Any action that is required or permitted to be taken by our unitholders may be taken either at a
meeting of our unitholders or without a meeting if consents in writing describing the action so taken are signed by holders of the number of units necessary to authorize or take that action at a meeting, except that election of directors by
unitholders may only be done at a meeting. Special meetings of our unitholders may be called by our general partner or by our unitholders owning at least 20% of the outstanding LP Units.
Annual meetings of limited partners for the election of directors to the board of directors of our general partner (as described below), and
such other matters as the board of directors of our general partner submits to a vote of the limited partners, will be held on the first Tuesday in June of each year or on such other date as is fixed by our general partner. Unitholders may vote
either in person or by proxy at meetings. The holders of a majority of the outstanding LP Units, represented in person or by proxy, will constitute a quorum.
Except as described below with respect to the election of directors, each record holder of a LP Unit has one vote per LP Unit, although
additional limited partner interests having special voting rights could be issued. Please read Issuance of Additional Securities. LP Units held in nominee or street name account will be voted by the broker or other nominee in
accordance with the instruction of the beneficial owner unless the arrangement between the beneficial owner and its nominee provides otherwise. With respect to the election of directors, our amended and restated partnership agreement provides that
if, at any time, any person or group beneficially owns 20% or more of the outstanding LP Units, then all LP Units owned by such person or group in excess of 20% of the outstanding LP Units may not be voted, and in each case, the foregoing LP Units
will not be counted when calculating the required votes for such matter and will not be deemed to be outstanding for purposes of determining a quorum for such meeting. Such LP Units will not be treated as a separate class for purposes of our amended
and restated partnership agreement. Notwithstanding the foregoing, the board of directors of our general partner may, by action specifically referencing votes for the election of directors, determine that the limitation described above will not
apply to a specific person or group.
Board of Directors
General.
The number of directors of our general partners board will be not less than six and not more than eleven. Any decrease in
the number of directors by our general partners board may not have the effect of shortening the term of any incumbent director. The board of directors of our general partner must maintain at least three directors meeting the independence and
experience requirements of any national securities exchange on which our LP Units are listed or quoted
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Directors.
Our directors are classified with respect to their terms of office by dividing
them into three classes, each class to be as nearly equal in number as possible. The directors that are designated to Class I will serve for a term that expires at the 2020 annual meeting, the directors designated to Class II will serve
for a term that expires at the 2018 annual meeting, and the directors designated to Class III will serve for a term that expires at the 2019 annual meeting. At each annual meeting of our unitholders, directors to replace directors whose terms
expire at such annual meeting will be elected to hold office until the third succeeding annual meeting. Each director will hold office for the term for which such director is elected or until such directors earlier death, resignation or
removal. Any vacancies may be filled by a majority of the remaining directors then in office. A director may be removed only for cause and only upon a vote of the majority of the remaining directors then in office.
Nominations of Directors.
Nominations of persons for election as directors may be made at an annual meeting of the limited partners
only (a) by or at the direction of the directors or any committee thereof or (b) by any public limited partner who (i) was a record holder at the time the notice provided for in our amended and restated partnership agreement is
delivered to our general partner, (ii) is entitled to vote at the meeting and (iii) complies with the notice procedures set forth in our amended and restated partnership agreement.
For any nominations brought before an annual meeting by a public limited partner, the limited partner must give timely notice thereof in
writing to our general partner. The notice must contain certain information as described in our amended and restated partnership agreement. To be timely, a public limited partners notice must be delivered to our general partner not later than
the close of business on the 90th day, nor earlier than the close of business on the 120th day, prior to the first anniversary of the preceding years annual meeting (
provided, however,
that in the event that the date of the
annual meeting is more than 30 days before or more than 70 days after such anniversary date, notice by the limited partner must be so delivered not earlier than the close of business on the 120th day prior to such annual meeting and
not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by us or our general partner). The
public announcement of an adjournment or postponement of an annual meeting will not commence a new time period (or extend any time period) for the giving of a limited partners notice as described above.
In the event that the number of directors is increased effective at an annual meeting and there is no public announcement by us or our general
partner naming the nominees for the additional directorships at least 100 days prior to the first anniversary of the preceding years annual meeting, a public limited partners notice will also be considered timely, but only with
respect to nominees for the additional directorships, if it is delivered to our general partner not later than the close of business on the 10th day following the day on which such public announcement is first made by us or our general partner.
Nominations of persons for election as directors also may be made at a special meeting of limited partners at which directors are to be
elected in accordance with the provisions of our amended and restated partnership agreement.
Only such persons who are nominated in
accordance with the procedures set forth in our amended and restated partnership agreement will be eligible to be elected at an annual or special meeting of limited partners to serve as directors. Notwithstanding the foregoing, unless otherwise
required by law, if the public limited partner who nominated a person to serve as a director (or a qualified representative of the limited partner) does not appear at the annual or special meeting of limited partners to present such nomination, such
nomination will be disregarded notwithstanding that proxies in respect of such vote may have been received by our general partner or us.
In addition to the provisions described above and in our amended and restated partnership agreement, a public limited partner must also comply
with all applicable requirements of the Exchange Act and the rules and regulations thereunder;
provided, however,
that any references in our amended and restated partnership
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agreement to the Exchange Act or the rules promulgated thereunder are not intended to and do not limit any requirements applicable to nominations pursuant to our amended and restated partnership
agreement, and compliance with our amended and restated partnership agreement is the exclusive means for a limited partner to make nominations.
Indemnification
Our amended and restated
partnership agreement and the agreements of limited partnership or operating agreements of our subsidiaries, as the case may be (together with our amended and restated partnership agreement, the Organizational Agreements) provide that we
or our subsidiaries, as the case may be, shall indemnify (to the extent permitted by applicable law) certain persons (each, an Indemnitee) against expenses (including legal fees and expenses), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such Indemnitee in connection with any threatened, pending or completed claim, demand, action, suit or proceeding (a claim) to which the Indemnitee is or was an actual or threatened party
and which relates to the Organizational Agreements or our, or any of our subsidiaries, property, business, affairs or management. This indemnity is available only if the Indemnitee acted in good faith and the action or omission which is the
basis of such claim, demand, action, suit or proceeding does not involve the gross negligence or willful misconduct of such Indemnitee. Indemnitees include our general partner, any affiliates of such general partner, any person who is or was a
director, officer, manager, member, employee or agent of such general partner or any affiliate, or any person who is or was serving at the request of such general partner or any such affiliate as a director, officer, manager, member, partner,
trustee, employee or agent of another individual, corporation, limited liability company, partnership, trust, unincorporated organization, association or other entity; and an Indemnitee shall be indemnified only in connection with any claim made by
reason of such Indemnitees status as such or any action taken or omitted to be taken in the Indemnitees capacity as such. Expenses subject to indemnity will be paid by us to the Indemnitee in advance, subject to receipt of an undertaking
by or on behalf of the Indemnitee to repay such amount if it is ultimately determined by a court of competent jurisdiction that the Indemnitee is not entitled to indemnification. We maintain a liability insurance policy on behalf of certain of the
Indemnitees.
Section 18-108
of the Delaware Limited Liability Company Act provides that,
subject to such standards and restrictions set forth in its limited liability company agreement, a Delaware limited liability company may indemnify and hold harmless any member or manager or other person from and against any and all claims and
demands whatsoever. Article V of the amended and restated limited liability company agreement of our general partner currently provides for the indemnification of affiliates of our general partner and members, managers, partners, officers,
directors, employees, agents and trustees of our general partner or any affiliate of our general partner and such persons who serve at the request of our general partner as members, managers, partners, officers, directors, employees, agents,
trustees and fiduciaries of any other enterprise against certain liabilities under certain circumstances.
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PLAN OF DISTRIBUTION
We may use this prospectus, any accompanying prospectus supplement and any related free writing prospectus to sell the LP Units from time to
time in one or more transactions as follows: (1) through agents, (2) through underwriters or dealers, (3) directly to one or more purchasers, (4) pursuant to delayed delivery contracts or forward contracts, (5) through a
combination of these methods or (6) through any other method permitted by applicable law.
By Agents
LP Units may be sold, from time to time, through agents designated by us. Unless otherwise indicated in a prospectus supplement, the agents
will agree to use their reasonable best efforts to solicit purchases for the period of their appointment.
By Underwriters
If underwriters are used in the sale, the LP Units of the series offered will be acquired by the underwriters for their own account. The
underwriters may resell the LP Units in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of resale. The obligations of the underwriters to purchase the LP Units
of the series offered will be subject to certain conditions. The underwriters will be obligated to purchase all the LP Units of the series offered if any of the securities are purchased. Any initial public offering price and any discounts or
concessions allowed or re-allowed or paid to dealers may be changed from time to time.
If we utilize a dealer in the sale, we will sell
the LP Units to the dealer, as principal. The dealer may then resell the LP Units to the public at varying prices to be determined by the dealer at the time of resale.
To the extent that we make sales through one or more underwriters or agents in at-the-market offerings, we will do so pursuant to the terms of
a sales agency financing agreement or other at-the-market offering arrangement between us and the underwriters or agents. If we engage in at-the-market sales pursuant to any such agreement, we will issue and sell LP Units through one or more
underwriters or agents, which may act on an agency basis or on a principal basis. During the term of any such agreement, we may sell LP Units on a daily basis in exchange transactions or otherwise as we agree with the underwriters or agents. The
agreement will provide that any LP Units sold will be sold at prices related to the then prevailing market prices for such securities. Therefore, exact figures regarding proceeds that will be raised or commissions to be paid cannot be determined at
this time. Pursuant to the terms of the agreement, we also may agree to sell, and the relevant underwriters or agents may agree to solicit offers to purchase, blocks of LP Units. The terms of each such agreement will be set forth in more detail in
the applicable prospectus supplement and any related free writing prospectus. In the event that any underwriter or agent acts as principal, or broker-dealer acts as underwriter, it may engage in certain transactions that stabilize, maintain, or
otherwise affect the price of LP Units. We will describe any such activities in the prospectus supplement or any related free writing prospectus relating to the transaction.
Direct Sales
LP Units may also be sold
directly by us from time to time. In this case, no underwriters or agents would be involved. We may use electronic media, including the Internet, to sell offered securities directly.
Delayed Delivery Contracts or Forward Contracts
If indicated in the prospectus supplement, we will authorize agents, underwriters or dealers to solicit offers to purchase LP Units from us at
the public offering price set forth in the prospectus supplement pursuant to
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delayed delivery contracts or forward contracts providing for payment or delivery on a specified date in the future at prices determined as described in the prospectus supplement. Such contracts
will be subject only to those conditions set forth in the prospectus supplement, and the prospectus supplement will set forth the commission payable for solicitation of such contracts.
General Information
Underwriters,
dealers and agents that participate in the distribution of the LP Units may be underwriters as defined in the Securities Act of 1933, as amended, and any discounts or commissions received by them from us and any profit on the resale of the LP Units
by them may be treated as underwriting discounts and commissions under the Securities Act. Any underwriters or agents will be identified and their compensation will be described in a prospectus supplement.
We may have agreements with the underwriters, dealers and agents to indemnify them against certain civil liabilities, including liabilities
under the Securities Act of 1933, as amended, or to contribute with respect to payments which the underwriters, dealers or agents may be required to make because of those liabilities.
Underwriters, dealers and agents or their affiliates may engage in transactions with, or perform services for, us or our affiliates in the
ordinary course of their businesses.
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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
This section summarizes the material U.S. federal income tax consequences that may be relevant to prospective unitholders and is based upon
current provisions of the Internal Revenue Code of 1986, as amended (the Code), existing and proposed Treasury regulations thereunder (the Treasury Regulations), and current administrative rulings and court decisions, all of
which are subject to change. Changes in these authorities may cause the federal income tax consequences to a prospective unitholder to vary substantially from those described below, possibly on a retroactive basis. Unless the context otherwise
requires, references in this section to we us or the Partnership are references to Buckeye Partners, L.P. and our operating subsidiaries.
Legal conclusions contained in this section, unless otherwise noted, are the opinion of Vinson & Elkins L.L.P. and are based on the
accuracy of representations made by us to them for this purpose. However, this section does not address all federal income tax matters that may affect us or our unitholders, such as the application of the alternative minimum tax. This section also
does not address local taxes, state taxes, non-U.S. taxes, or other taxes that may be applicable, except to the limited extent that such tax considerations are addressed below under State Local and Other Tax Considerations.
Furthermore, this section focuses on unitholders who are individual citizens or residents of the United States (for federal income tax purposes), who have the U.S. dollar as their functional currency, who use the calendar year as their taxable year,
who purchase LP Units in this offering, who do not materially participate in the conduct of our business activities and who hold such LP Units as capital assets (typically, property that is held for investment). This section has limited
applicability to corporations (including other entities treated as corporations for federal income tax purposes), partnerships (including other entities treated as partnerships for federal income tax purposes), estates, trusts, non-resident aliens
or other unitholders subject to specialized tax treatment, such as tax-exempt entities, non-U.S. persons, individual retirement accounts (IRAs), employee benefit plans, real estate investment trusts or mutual funds.
Accordingly, we encourage each prospective unitholder to consult the unitholders own tax advisor in analyzing the federal, state,
local and non-U.S. tax consequences particular to that unitholder resulting from ownership or disposition of our LP Units and potential changes in applicable tax laws.
We are relying on the opinions and advice of Vinson & Elkins L.L.P. with respect to the matters described herein. An opinion of
counsel represents only that counsels best legal judgment and does not bind the Internal Revenue Service (the IRS) or a court. Accordingly, the opinions and statements made herein may not be sustained by a court if contested by the
IRS. Any such contest of the matters described herein may materially and adversely impact the market for our LP Units and the prices at which our LP Units trade. In addition, our costs of any contest with the IRS will be borne indirectly by our
unitholders and our general partner because the costs will reduce our cash available for distribution. Furthermore, the tax consequences of an investment in us may be significantly modified by future legislative or administrative changes or court
decisions, which may be retroactively applied.
For the reasons described below, Vinson & Elkins L.L.P. has not rendered an
opinion with respect to the following federal income tax issues:
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the treatment of a unitholder whose LP Units are the subject of a securities loan (e.g., a loan to a short seller to cover a short sale of LP Units) (please read Tax Consequences of LP Unit
OwnershipTreatment of Securities Loans);
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whether our monthly convention for allocating taxable income and losses is permitted by existing Treasury Regulations (please read Disposition of LP UnitsAllocations Between Transferors and
Transferees); and
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whether our method for taking into account Section 743 adjustments is sustainable in certain cases (please read Tax Consequences of LP Unit OwnershipSection 754 Election and
Uniformity of LP Units).
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Taxation of the Partnership
Partnership Status
We expect to be
treated as a partnership for U.S. federal income tax purposes and, therefore, subject to the discussion below under Administrative MattersInformation Returns and Audit Procedures, generally will not be liable for entity-level
federal income taxes. Instead, as described below, each of our unitholders will take into account its respective share of our items of income, gain, loss and deduction in computing its federal income tax liability as if the unitholder had earned
such income directly, even if we make no cash distributions to the unitholder. Distributions we make to a unitholder will not give rise to income or gain taxable to such unitholder, unless the amount of cash distributed exceeds the unitholders
adjusted tax basis in its LP Units. Please read Tax Consequences of LP Unit OwnershipTreatment of Distributions and Disposition of LP Units).
Section 7704 of the Code generally provides that a publicly-traded partnership will be treated as a corporation for federal income tax
purposes. However, if 90% or more of a partnerships gross income for every taxable year it is publicly-traded consists of qualifying income, the partnership may continue to be treated as a partnership for federal income tax
purposes (the Qualifying Income Exception). Qualifying income includes, (i) interest, (ii) dividends, (iii) real property rents within the meaning of section 856(d) of the Code, as modified by Section 7704(d)(3)
of the Code, (iv) gains from the sale or other disposition of real property, (v) income and gains derived from the exploration, development, mining or production, processing, refining, transportation (including pipelines transporting gas,
oil, or products thereof) or the marketing of any mineral or natural resource, and (vi) gains from the sale or other disposition of capital assets (or property described in Section 1231(b) of the Code) held for the production
income that otherwise constitutes of qualifying income. We estimate that less than 5% of our current gross income is not qualifying income; however, this estimate could change from time to time.
No ruling has been or will be sought from the IRS with respect to our classification as a partnership for federal income tax purposes or as to
the classification of our partnership and limited liability company operating subsidiaries. Instead we have relied on the opinion of counsel that, based upon the Code, existing Treasury Regulations, published revenue rulings and court decisions and
representations described below, we and our partnership and limited liability company operating subsidiaries, other than those that have been identified as corporations to Vinson & Elkins L.L.P., will be classified as a partnerships or
disregarded as an entities separate from us for federal income tax purposes.
Vinson & Elkins L.L.P. is of the opinion that we
will be treated as a partnership for federal income tax purposes and each of our operating subsidiaries, other than those that have been identified as corporations to Vinson & Elkins L.L.P., will be treated as a partnership or will be
disregarded as an entity separate from us. In rendering its opinion, Vinson & Elkins L.L.P. has relied on factual representations made by us and our general partner, including, without limitation:
(a) Neither we nor any of our partnership or limited liability company operating subsidiaries, other than those that have been
identified as corporations to Vinson & Elkins L.L.P., has elected or will elect to be treated as a corporation for federal income tax purposes;
(b) For each taxable year since and including the year of our initial public offering, more than 90% of our gross income has
been and will be income of a character that Vinson & Elkins L.L.P. has opined is qualifying income within the meaning of Section 7704(d) of the Code; and
(c) Each hedging transaction that we treat as resulting in qualifying income has been and will be appropriately identified as a
hedging transaction pursuant to applicable Treasury Regulations, and has been and will be associated with crude oil, natural gas or products thereof that are held or to be held by us in activities that Vinson & Elkins L.L.P. has opined or
will opine result in qualifying income.
We believe that these representations are true and will be true in the future.
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If we fail to meet the Qualifying Income Exception, other than a failure that is determined by
the IRS to be inadvertent and that is cured within a reasonable time after discovery (in which case the IRS may also require us to make adjustments with respect to our unitholders or pay other amounts), we will be treated as transferring all of our
assets, subject to all of our liabilities, to a newly formed corporation, on the first day of the year in which we fail to meet the Qualifying Income Exception in return for stock in that corporation and then as distributing that stock to our
unitholders in liquidation. This deemed contribution and liquidation should not result in the recognition of taxable income by our unitholders or us so long as the aggregate amount of our liabilities does not exceed the adjusted tax basis of our
assets. Thereafter, we would be treated as an association taxable as a corporation for federal income tax purposes.
The present federal
income tax treatment of publicly traded partnerships, including us, or an investment in our LP Units may be modified by administrative or legislative action or judicial interpretation at any time. From time to time, members of the U.S. Congress have
proposed and considered substantive changes to the existing federal income tax laws that would affect publicly-traded partnerships. One such legislative proposal would have eliminated the Qualifying Income Exception upon which we rely for our
treatment as a partnership for federal income tax purposes.
In addition, on January 24, 2017, final regulations regarding which
activities give rise to qualifying income (the Final Regulations) within the meaning of Section 7704 of the Code were published in the Federal Register. The Final Regulations are effective as of January 19, 2017, and apply to
taxable years beginning on or after January 19, 2017. We do not believe the Final Regulations affect our ability to qualify as a publicly traded partnership.
It is possible that a change in law could affect us and may be applied retroactively. Any such changes could negatively impact the value of an
investment in our LP Units. If for any reason we are taxable as a corporation in any taxable year, our items of income, gain, loss and deduction would be taken into account by us in determining the amount of our liability for federal income tax,
rather than being passed through to our unitholders.
At the state level, several states have been evaluating ways to subject partnerships
to entity-level taxation through the imposition of state income, franchise, or other forms of taxation. Imposition of a similar tax on us in the jurisdictions in which we operate or in other jurisdictions to which we may expand could substantially
reduce our cash available for distribution to our unitholders.
Our partnership agreement provides that if a law is enacted or existing
law is modified or interpreted in a manner that subjects us to taxation as a corporation or because our general partner makes an election for us to be taxed as a corporation or otherwise subjects us to entity-level taxation for federal, state or
local income tax purposes, the minimum quarterly distribution amount and the target distribution amounts may be adjusted to reflect the impact of that law on us. Our taxation as a corporation would materially reduce the cash available for
distribution to unitholders and thus would likely substantially reduce the value of our LP Units. Any distribution made to a unitholder at a time when we are treated as a corporation would be (i) a taxable dividend to the extent of our current
or accumulated earnings and profits, then (ii) a nontaxable return of capital to the extent of the unitholders adjusted tax basis in its LP Units (determined separately for each unit), and thereafter (iii) taxable capital gain.
The remainder of this discussion is based on the opinion of Vinson & Elkins L.L.P. that we will be treated as a partnership for
federal income tax purposes.
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Tax Consequences of LP Unit Ownership
Limited Partner Status
Unitholders
of Buckeye Partners, L.P. who are admitted as limited partners of the partnership will be treated as partners of Buckeye Partners, L.P. for federal income tax purposes. Unitholders whose LP Units are held in street name or by a nominee and who have
the right to direct the nominee in the exercise of all substantive rights attendant to the ownership of their LP Units will be treated as partners of Buckeye Partners, L.P. for federal income tax purposes.
In addition, a beneficial owner of LP Units whose LP Units have been transferred to a short seller to complete a short sale would appear to
lose their status as a partner with respect to such LP Units for federal income tax purposes. Please read Tax Consequences of LP Unit OwnershipTreatment of Securities Loans.
Income, gain, deductions or losses would not appear to be reportable by a unitholder who is not a partner for federal income tax purposes, and
any cash distributions received by a unitholder who is not a partner for federal income tax purposes would therefore appear to be fully taxable as ordinary income. A unitholder who is not treated as a partner in us as described above is urged to
consult its own tax advisors with respect to the tax consequences applicable to such unitholder under its particular circumstances.
Flow-Through of
Taxable Income
Subject to the discussion below under Entity-Level Collections of Unitholder Taxes and
Administrative MattersInformation Returns and Audit Procedures, and assuming, our general partner does not make an election for us to be taxed as a corporation as a result of a change in tax law, with respect to payments we
may be required to make on behalf of our unitholders, we will not pay any federal income tax. Rather, each unitholder will be required to report on its federal income tax return each year its share of our income, gains, losses and deductions for our
taxable year or years ending with or within its taxable year. Consequently, we may allocate income to a unitholder even if that unitholder has not received a cash distribution.
Basis of LP Units
A
unitholders tax basis in its LP Units initially will be the amount paid for those LP Units increased by the unitholders initial allocable share of our liabilities. That basis generally will be (i) increased by the unitholders
share of our income and any increases in such unitholders share of our liabilities, and (ii) decreased, but not below zero, by the amount of all distributions to the unitholder, the unitholders share of our losses, and any decreases
in its share of our liabilities. The IRS has ruled that a partner who acquires interests in a partnership in separate transactions must combine those interests and maintain a single adjusted tax basis for all of those interests.
Treatment of Distributions
Distributions made by us to a unitholder generally will not be taxable to the unitholder, unless such distributions are of cash or marketable
securities that are treated as cash and exceed the unitholders tax basis in its LP Units, in which case the unitholder generally will recognize gain taxable in the manner described below under Disposition of LP Units.
Any reduction in a unitholders share of our nonrecourse liabilities (liabilities for which no partner bears the economic
risk of loss) will be treated as a distribution by us of cash to that unitholder. A decrease in a unitholders percentage interest in us because of our issuance of additional LP Units may decrease such unitholders share of our nonrecourse
liabilities. For purposes of the foregoing, a unitholders share of our nonrecourse liabilities generally will be based upon such unitholders share of the unrealized appreciation (or depreciation) in our assets, to the extent thereof,
with any excess nonrecourse liabilities allocated based on the unitholders share of our profits. Please read Disposition of LP Units.
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A non-pro rata distribution of money or property (including a deemed distribution as a result of
the reallocation of our nonrecourse liabilities described above) may cause a unitholder to recognize ordinary income if the distribution reduces the unitholders share of our unrealized receivables, including depreciation recapture
and substantially appreciated inventory items, both as defined in Section 751 of the Code (Section 751 Assets). To the extent of such reduction, the unitholder would be deemed to receive its proportionate share of
the Section 751 Assets and exchange such assets with us in return for a portion of the non-pro rata distribution. This deemed exchange will generally result in the unitholders recognition of ordinary income in an amount equal to the
excess of (1) the non-pro rata portion of that distribution over (2) the unitholders tax basis (typically zero) in the Section 751 Assets deemed to be relinquished in the exchange.
Limitations on Deductibility of Losses
A unitholder may not be entitled to deduct the full amount of loss we allocate to it because its share of our losses will be limited to the
lesser of (i) the unitholders adjusted tax basis in its LP Units, and (ii) in the case of a unitholder that is an individual, estate, trust or certain types of closely-held corporations, the amount for which the unitholder is
considered to be at risk with respect to our activities. A unitholder will be at risk to the extent of its adjusted tax basis in its LP Units, reduced by (1) any portion of that basis attributable to the unitholders share of
our nonrecourse liabilities, (2) any portion of that basis representing amounts otherwise protected against loss because of a guarantee, stop loss agreement or similar arrangement, and (3) any amount of money the unitholder borrows to
acquire or hold its LP Units, if the lender of those borrowed funds owns an interest in us, is related to another unitholder or can look only to the LP Units for repayment. A unitholder subject to the at risk limitation must recapture losses
deducted in previous years to the extent that distributions (including distributions deemed to result from a reduction in a unitholders share of nonrecourse liabilities) cause the unitholders at risk amount to be less than zero at the
end of any taxable year.
Losses disallowed to a unitholder or recaptured as a result of the basis or at risk limitations will carry
forward and will be allowable as a deduction in a later year to the extent that the unitholders adjusted tax basis or at risk amount, whichever is the limiting factor, is subsequently increased. Upon a taxable disposition of our LP Units, any
gain recognized by a unitholder can be offset by losses that were previously suspended by the at risk limitation but not losses suspended by the basis limitation. Any loss previously suspended by the at risk limitation in excess of that gain can no
longer be used, and will not be available to offset a unitholders salary or active business income.
In addition to the basis and at
risk limitations, a passive activity loss limitation limits the deductibility of losses incurred by individuals, estates, trusts, some closely-held corporations and personal service corporations from passive activities (such as, trade or
business activities in which the taxpayer does not materially participate). The passive loss limitations are applied separately with respect to each publicly-traded partnership. Consequently, any passive losses we generate will be available to
offset only passive income generated by us. Passive losses that exceed a unitholders share of the passive income we generate may be deducted in full when a unitholder disposes of all of its LP Units in a fully taxable transaction with an
unrelated party. The passive activity loss rules are applied after other applicable limitations on deductions, including the at risk and basis limitations.
Limitations on Interest Deductions
The deductibility of a non-corporate taxpayers investment interest expense is generally limited to the amount of that
taxpayers net investment income. Investment interest expense includes:
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interest on indebtedness allocable to property held for investment;
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interest expense allocated against portfolio income; and
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the portion of interest expense incurred to purchase or carry an interest in a passive activity to the extent allocable against portfolio income.
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The computation of a unitholders investment interest expense will take into account
interest on any margin account borrowing or other loan incurred to purchase or carry an LP Unit. Net investment income includes gross income from property held for investment and amounts treated as portfolio income under the passive loss rules, less
deductible expenses, other than interest, directly connected with the production of investment income. Net investment income does not include qualified dividend income (if applicable) or gains attributable to the disposition of property held for
investment. A unitholders share of a publicly-traded partnerships portfolio income and, according to the IRS, net passive income will be treated as investment income for purposes of the investment interest expense limitation.
Entity-Level Collections of Unitholder Taxes
If we are required or elect under applicable law to pay any federal, state, local or non-U.S. tax on behalf of any current or former unitholder
or our general partner, our partnership agreement authorizes us to treat the payment as a distribution of cash to the relevant unitholder or general partner. Where the tax is payable on behalf of all unitholders or we cannot determine the specific
unitholder on whose behalf the tax is payable, our partnership agreement authorizes us to treat the payment as a distribution to all current unitholders. We are authorized to amend our partnership agreement in the manner necessary to maintain
uniformity of intrinsic tax characteristics of units and to adjust later distributions, so that after giving effect to these distributions, the priority and characterization of distributions otherwise applicable under our partnership agreement is
maintained as nearly as is practicable. Payments by us as described above could give rise to an overpayment of tax on behalf of a unitholder, in which event the unitholder may be entitled to claim a refund of the overpayment amount. Please read
Administrative MattersInformation Returns and Audit Procedures. Each unitholder is urged to consult its tax advisor to determine the consequences to them of any tax payment we make on its behalf.
Allocation of Income, Gain, Loss and Deduction
In general, if we have a net profit, our items of income, gain, loss and deduction will be allocated amongst our unitholders in accordance with
their percentage interests in us. Specified items of our income, gain, loss and deduction will be allocated under Section 704(c) of the Code (or the principles of Section 704(c) of the Code) to account for any difference between the
adjusted tax basis and fair market value of our assets at the time such assets are contributed to us and at the time of any subsequent offering of our LP Units (a Book-Tax Disparity). As a result, the federal income tax burden associated
with any Book-Tax Disparity immediately prior to an offering will be borne by our partners holding interests in us prior to such offering. In addition, items of recapture income will be specially allocated to the extent possible (subject to the
limitations described above) to the unitholder who was allocated the deduction giving rise to that recapture income in order to minimize the recognition of ordinary income by other unitholders.
An allocation of items of our income, gain, loss or deduction, other than an allocation required by the Code to eliminate a Book-Tax
Disparity, will be given effect for federal income tax purposes in determining a unitholders share of an item of income, gain, loss or deduction only if the allocation has substantial economic effect. In any other case, a
unitholders share of an item will be determined on the basis of the unitholders interest in us, which will be determined by taking into account all the facts and circumstances, including (i) the unitholders relative
contributions to us, (ii) the interests of all the partners in profits and losses, (iii) the interest of all the partners in cash flow and (iv) the rights of all the partners to distributions of capital upon liquidation.
Vinson & Elkins L.L.P. is of the opinion that, with the exception of the issues described in Section 754 Election and Disposition of LP UnitsAllocations Between Transferors and Transferees,
allocations of income, gain, loss or deduction under our partnership agreement will be given effect for federal income tax purposes.
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Treatment of Securities Loans
A unitholder whose LP Units are the subject of a securities loan (for example, a loan to a short seller to cover a short sale of
units) may be treated as having disposed of those LP Units. If so, such unitholder would no longer be treated for tax purposes as a partner with respect to those LP Units during the period of the loan and may recognize gain or loss as a result of
such deemed disposition. As a result, during this period (i) any of our income, gain, loss or deduction allocated to those LP Units would not be reportable by the lending unitholder, and (ii) any cash distributions received by the lending
unitholder as to those LP Units may be treated as ordinary taxable income.
Due to a lack of controlling authority, Vinson &
Elkins L.L.P. has not rendered an opinion regarding the tax treatment of a unitholder that enters into a securities loan with respect to its LP Units. A unitholder desiring to assure its status as partners and avoid the risk of income recognition
from a loan of its LP Units is urged to modify any applicable brokerage account agreements to prohibit its brokers from borrowing and lending its LP Units. The IRS has announced that it is studying issues relating to the tax treatment of short sales
of partnership interests. Please read Disposition of LP UnitsRecognition of Gain or Loss.
Tax Rates
Under current law, the highest marginal federal income tax rates for individuals applicable to ordinary income and long-term capital gains
(generally, gains from the sale or exchange of certain investment assets held for more than one year) are 39.6% and 20%, respectively. These rates are subject to change by new legislation at any time.
In addition, a 3.8% net investment income tax applies to certain net investment income earned by individuals, estates, and trusts. For these
purposes, net investment income generally includes a unitholders allocable share of our income and gain realized by a unitholder from a sale of LP Units. In the case of an individual, the tax will be imposed on the lesser of (i) the
unitholders net investment income from all investments, or (ii) the amount by which the unitholders modified adjusted gross income exceeds $250,000 (if the unitholder is married and filing jointly or a surviving spouse), $125,000
(if married filing separately) or $200,000 (if the unitholder is unmarried or in any other case). In the case of an estate or trust, the tax will be imposed on the lesser of (i) undistributed net investment income, or (ii) the excess
adjusted gross income over the dollar amount at which the highest income tax bracket applicable to an estate or trust begins.
Section 754
Election
We have made the election permitted by Section 754 of the Code that permits us to adjust the tax basis in each of
our assets as to specific purchasers of our LP Units under Section 743(b) of the Code to reflect the unit purchase price upon subsequent purchases of LP Units. That election is irrevocable without the consent of the IRS. The Section 743(b)
adjustment separately applies to a unitholder who purchases LP Units from another unitholder based upon the values and adjusted tax basis of each of our assets at the time of the relevant purchase, and the adjustment will reflect the purchase price
paid. The Section 743(b) adjustment does not apply to a person who purchases LP Units directly from us. For purposes of this discussion, a unitholders basis in our assets will be considered to have two components: (1) its share of
the tax basis in our assets as to all unitholders and (2) its Section 743(b) adjustment to that tax basis (which may be positive or negative).
Under our partnership agreement, we are authorized to take a position to preserve the uniformity of LP Units even if that position is not
consistent with applicable Treasury Regulations. A literal application of Treasury Regulations governing a Section 743(b) adjustment attributable to properties depreciable under Section 167 of the Code may give rise to differences in the
taxation of unitholders purchasing LP Units from us and unitholders purchasing from other unitholders. If we have any such properties, we intend to adopt methods employed by other publicly traded partnerships to preserve the uniformity of LP Units,
even if inconsistent with
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existing Treasury Regulations, and Vinson & Elkins L.L.P. has not opined on the validity of this approach. Please read Uniformity of LP Units.
The IRS may challenge the positions we adopt with respect to depreciating or amortizing the Section 743(b) adjustment to preserve the
uniformity of LP Units due to the lack of controlling authority. Because a unitholders adjusted tax basis for its LP Units is reduced by its share of our items of deduction or loss, any position we take that understates deductions will
overstate a unitholders basis in its LP Units, and may cause the unitholder to understate gain or overstate loss on any sale of such LP Units. Please read Disposition of LP UnitsRecognition of Gain or Loss. If a
challenge to such treatment were sustained, the gain from the sale of LP Units may be increased without the benefit of additional deductions.
The calculations involved in the Section 754 election are complex and are made on the basis of assumptions as to the value of our assets
and other matters. The IRS could seek to reallocate some or all of any Section 743(b) adjustment we allocated to our depreciable assets to goodwill or nondepreciable assets. Goodwill, as an intangible asset, is generally amortizable over a
longer period of time or under a less accelerated method than certain of our tangible assets. We cannot assure any unitholder that the determinations we make will not be successfully challenged by the IRS or that the resulting deductions will not be
reduced or disallowed altogether. Should the IRS require a different tax basis adjustment to be made, and should, in our opinion, the expense of compliance exceed the benefit of the election, we may seek permission from the IRS to revoke our
Section 754 election. If permission is granted, a subsequent purchaser of LP Units may be allocated more income than it would have been allocated had the election not been revoked.
Tax Treatment of Operations
Accounting Method and
Taxable Year
We will use the year ending December 31 as our taxable year and the accrual method of accounting for federal
income tax purposes. Each unitholder will be required to include in its tax return its share of our income, gain, loss and deduction for each taxable year ending within or with its taxable year. In addition, a unitholder who has a taxable year
ending on a date other than December 31 and who disposes of all of its LP Units following the close of our taxable year but before the close of its taxable year must include its share of our income, gain, loss and deduction in income for its
taxable year, with the result that it will be required to include in income for its taxable year its share of more than twelve months of our income, gain, loss and deduction. Please read Disposition of LP UnitsAllocations Between
Transferors and Transferees.
Tax Basis, Depreciation and Amortization
The tax basis of each of our assets will be used for purposes of computing depreciation and cost recovery deductions and, ultimately, gain or
loss on the disposition of these assets. If we dispose of depreciable property by sale, foreclosure or otherwise, all or a portion of any gain, determined by reference to the amount of depreciation and deductions previously taken, may be subject to
the recapture rules and taxed as ordinary income rather than capital gain. Similarly, a unitholder who has taken cost recovery or depreciation deductions with respect to property we own will likely be required to recapture some or all of those
deductions as ordinary income upon a sale of its interest in us. Please read Tax Consequences of LP Unit OwnershipAllocation of Income, Gain, Loss and Deduction and Disposition of LP UnitsRecognition of Gain
or Loss.
The costs we incur in offering and selling our LP Units (called syndication expenses) must be capitalized and
cannot be deducted currently, ratably or upon our termination. While there are uncertainties regarding the classification of certain costs as organization expenses, which may be amortized by us, and as syndication expenses, which may not be
amortized by us, the underwriting discounts and commissions we incur will be treated as syndication expenses. Please read Disposition of LP UnitsRecognition of Gain or Loss.
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Valuation and Tax Basis of Each of Our Properties
The federal income tax consequences of the ownership and disposition of LP Units will depend in part on our estimates of the relative fair
market values and the tax basis of each of our assets. Although we may from time to time consult with professional appraisers regarding valuation matters, we will make many of the relative fair market value estimates ourselves. These estimates and
determinations of tax basis are subject to challenge and will not be binding on the IRS or the courts. If the estimates of fair market value or tax basis are later found to be incorrect, the character and amount of items of income, gain, loss or
deduction previously reported by a unitholder could change, and such unitholder could be required to adjust its tax liability for prior years and incur interest and penalties with respect to those adjustments.
Disposition of LP Units
Recognition of Gain or
Loss
A unitholder will be required to recognize gain or loss on a sale or exchange of a unit equal to the difference, if any,
between the unitholders amount realized and the adjusted tax basis in the unit sold. A unitholders amount realized generally will equal the sum of the cash and the fair market value of other property it receives plus its share of our
nonrecourse liabilities with respect to the unit sold or exchanged. Because the amount realized includes a unitholders share of our nonrecourse liabilities, the gain recognized on the sale or exchange of a unit could result in a tax liability
in excess of any cash received from such sale or exchange.
Except as noted below, gain or loss recognized by a unitholder on the sale or
exchange of a unit held for more than one year generally will be taxable as long-term capital gain or loss. However, gain or loss recognized on the disposition of LP Units will be separately computed and taxed as ordinary income or loss under
Section 751 of the Code to the extent attributable to Section 751 Assets, such as depreciation recapture and our inventory items, regardless of whether such inventory item has substantially appreciated in value. Ordinary income
attributable to Section 751 Assets may exceed net taxable gain realized on the sale or exchange of a unit and may be recognized even if there is a net taxable loss realized on the sale or exchange of a unit. Thus, a unitholder may recognize
both ordinary income and capital gain or loss upon a sale or exchange of a unit. Net capital loss may offset capital gains and, in the case of individuals, up to $3,000 of ordinary income per year.
For purposes of calculating gain or loss on the sale or exchange of a unit, the unitholders adjusted tax basis will be adjusted by its
allocable share of our income or loss in respect of its unit for the year of the sale. Furthermore, as described above, the IRS has ruled that a partner who acquires interests in a partnership in separate transactions must combine those interests
and maintain a single adjusted tax basis for all those interests. Upon a sale or other disposition of less than all of those interests, a portion of that tax basis must be allocated to the interests sold using an equitable apportionment
method, which generally means that the tax basis allocated to the interest sold equals an amount that bears the same relation to the partners tax basis in its entire interest in the partnership as the value of the interest sold bears to the
value of the partners entire interest in the partnership.
Treasury Regulations under Section 1223 of the Code allow a selling
unitholder who can identify LP Units transferred with an ascertainable holding period to elect to use the actual holding period of the LP Units transferred. Thus, according to the ruling discussed in the paragraph above, a unitholder will be unable
to select high or low basis LP Units to sell or exchange as would be the case with corporate stock, but, according to the Treasury Regulations, such unitholder may designate specific LP Units sold for purposes of determining the holding period of
the LP Units transferred. A unitholder electing to use the actual holding period of any unit transferred must consistently use that identification method for all subsequent sales or exchanges of our LP Units. A unitholder considering the purchase of
additional LP Units or a sale or exchange of LP Units purchased in separate transactions is urged to consult its tax advisor as to the possible consequences of this ruling and application of the Treasury Regulations.
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Specific provisions of the Code affect the taxation of some financial products and securities,
including partnership interests, by treating a taxpayer as having sold an appreciated financial position, including a partnership interest with respect to which gain would be recognized if it were sold, assigned or terminated at its fair
market value, in the event the taxpayer or a related person enters into:
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an offsetting notional principal contract; or
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a futures or forward contract with respect to the partnership interest or substantially identical property.
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Moreover, if a taxpayer has previously entered into a short sale, an offsetting notional principal contract or a futures or forward contract
with respect to the partnership interest, the taxpayer will be treated as having sold that position if the taxpayer or a related person then acquires the partnership interest or substantially identical property. The Secretary of the Treasury is
authorized to issue Treasury Regulations that treat a taxpayer that enters into transactions or positions that have substantially the same effect as the preceding transactions as having constructively sold the financial position. Please read
Tax Consequences of LP Unit OwnershipTreatment of Securities Loans.
Allocations Between Transferors and Transferees
In general, our taxable income or loss will be determined annually, will be prorated on a monthly basis and will be subsequently
apportioned among the unitholders in proportion to the number of LP Units owned by each of them as of the opening of the applicable exchange on the first business day of the month (the Allocation Date). Nevertheless, we allocate certain
deductions for depreciation of capital additions based upon the date the underlying property is placed in service, and gain or loss realized on a sale or other disposition of our assets or, in the discretion of the general partner, any other
extraordinary item of income, gain, loss or deduction will be allocated among the unitholders on the Allocation Date in the month in which such income, gain, loss or deduction is recognized. As a result, a unitholder transferring LP Units may be
allocated income, gain, loss and deduction realized after the date of transfer.
Although simplifying conventions are contemplated by the
Code and most publicly traded partnerships use similar simplifying conventions, existing Treasury Regulations do not specifically authorize the use of the proration method we have adopted. Accordingly, Vinson & Elkins L.L.P. is unable
to opine on the validity of this method of allocating income and deductions between transferee and transferor unitholders. If the IRS determines that this method is not allowed under the Treasury Regulations our taxable income or losses could be
reallocated among our unitholders. Under our partnership agreement, we are authorized to revise our method of allocation between transferee and transferor unitholders, as well as among unitholders whose interests vary during a taxable year, to
conform to a method permitted under the Treasury Regulations.
A unitholder who disposes of LP Units prior to the record date set for a
cash distribution for that quarter will be allocated items of our income, gain, loss and deduction attributable to the month of disposition but will not be entitled to receive a cash distribution for that period.
Notification Requirements
A
unitholder who sells or exchanges any of its LP Units is generally required to notify us in writing of that transaction within 30 days after the transaction (or, if earlier, January 15 of the year following the transaction in the case of a
seller). Upon receiving such notifications, we are required to notify the IRS of the transaction and to furnish specified information to the transferor and transferee. Failure to notify us of a transfer of LP Units may, in some cases, lead to the
imposition of penalties. However, these reporting requirements do not apply to a sale by an individual who is a citizen of the United States and who effects the sale or exchange through a broker who will satisfy such requirements.
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Technical Termination
We will be considered to have technically terminated our partnership for federal income tax purposes upon the sale or exchange of 50% or more
of the total interests in our capital and profits within a twelve-month period. For purposes of measuring whether the 50% threshold is reached, multiple sales of the same unit are counted only once. A technical termination results in the closing of
our taxable year for all unitholders. In the case of a unitholder reporting on a taxable year other than the calendar year, the closing of our taxable year may result in more than twelve months of our taxable income or loss being includable in such
unitholders taxable income for the year of termination.
A technical termination occurring on a date other than December 31
would require that we file two tax returns for one fiscal year, thereby increasing our administration and tax preparation costs. However, pursuant to an IRS relief procedure the IRS may allow a technically terminated partnership to provide a single
Schedule K-1 for the calendar year in which a termination occurs. Following a technical termination, we would be required to make new tax elections, including a new election under Section 754 of the Code, and the termination would result in a
deferral of our deductions for depreciation and thus may increase the taxable income allocable to our unitholders. A technical termination could also result in penalties if we were unable to determine that the technical termination had occurred.
Moreover, a technical termination may either accelerate the application of, or subject us to, any tax legislation enacted before the technical termination that would not otherwise have been applied to us as a continuing partnership as opposed to a
terminating partnership.
Uniformity of LP Units
Because we cannot match transferors and transferees of LP Units and for other reasons, we must maintain uniformity of the economic and tax
characteristics of the LP Units to a purchaser of these LP Units. As a result of the need to preserve uniformity, we may be unable to completely comply with a number of federal income tax requirements. Any non-uniformity could have a negative impact
on the value of our LP Units. Please read Tax Consequences of LP Unit OwnershipSection 754 Election.
Our
partnership agreement permits our general partner to take positions in filing our tax returns that preserve the uniformity of our LP Units. These positions may include reducing the depreciation, amortization or loss deductions to which a unitholder
would otherwise be entitled or reporting a slower amortization of Section 743(b) adjustments for some unitholders than that to which they would otherwise be entitled. Vinson & Elkins L.L.P. is unable to opine as to the validity of such
filing positions.
A unitholders adjusted tax basis in LP Units is reduced by its share of our deductions (whether or not such
deductions were claimed on an individual income tax return) so that any position that we take that understates deductions will overstate the unitholders basis in its LP Units, and may cause the unitholder to understate gain or overstate loss
on any sale of such LP Units. Please read Disposition of LP UnitsRecognition of Gain or Loss and Tax Consequences of LP Unit OwnershipSection 754 Election above. The IRS may challenge one or more
of any positions we take to preserve the uniformity of our LP Units. If such a challenge were sustained, the uniformity of LP Units might be affected, and, under some circumstances, the gain from any sale of our LP Units might be increased without
the benefit of additional deductions.
Tax-Exempt Organizations and Other Investors
Ownership of our LP Units by employee benefit plans and other tax-exempt organizations, as well as by non-resident alien individuals, non-U.S.
corporations and other non-U.S. persons (collectively, Non-U.S. Unitholders) raises issues unique to those investors and, as described below, may have substantially adverse tax consequences to them. Each prospective unitholder that is a
tax-exempt entity or a Non-U.S. Unitholder should consult its tax advisors before investing in our LP Units.
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Employee benefit plans and most other tax-exempt organizations, including IRAs and other
retirement plans, are subject to federal income tax on unrelated business taxable income. Virtually all of our income will be unrelated business taxable income and will be taxable to a tax-exempt unitholder.
Non-U.S. Unitholders are taxed by the United States on income effectively connected with a U.S. trade or business (effectively connected
income) and on certain types of U.S.-source non-effectively connected income (such as dividends), unless exempted or further limited by an income tax treaty. Each
Non-U.S.
Unitholder will be considered
to be engaged in business in the United States because of its ownership of our LP Units. Furthermore, it is probable that Non-U.S. Unitholders will be deemed to conduct such activities through a permanent establishment in the United States within
the meaning of an applicable tax treaty. Consequently, each Non-U.S. Unitholder will be required to file federal tax returns to report its share of our income, gain, loss or deduction and pay federal income tax on its share of our net income or
gain. Moreover, under rules applicable to publicly-traded partnerships, distributions to Non-U.S. Unitholders are subject to withholding at the highest applicable effective tax rate. Each Non-U.S. Unitholder must obtain a taxpayer identification
number from the IRS and submit that number to our transfer agent on a
Form W-8BEN
or
W-8BEN-E
(or other applicable or
successor form) in order to obtain credit for these withholding taxes.
In addition, if a Non-U.S. Unitholder is classified as a non-U.S.
corporation, it will be treated as engaged in a United States trade or business and may be subject to the U.S. branch profits tax at a rate of 30%, in addition to regular U.S. federal income tax, on its share of our income and gain as adjusted for
changes in the foreign corporations U.S. net equity to the extent reflected in the corporations earnings and profits. That tax may be reduced or eliminated by an income tax treaty between the United States and the country in
which the foreign corporate unitholder is a qualified resident. In addition, this type of unitholder is subject to special information reporting requirements under Section 6038C of the Code.
A Non-U.S. Unitholder who sells or otherwise disposes of an LP Unit will be subject to U.S. federal income tax on gain realized from the sale
or disposition of that LP Unit to the extent the gain is effectively connected with a U.S. trade or business of the Non-U.S. Unitholder. Although the only court that has reviewed this IRS position rejected it as unpersuasive, under a ruling
published by the IRS interpreting the scope of effectively connected income, gain realized by a Non-U.S. Unitholder from the sale of its interest in a partnership that is engaged in a trade or business in the United States will be
considered to be effectively connected with a U.S. trade or business. Thus, part or all of a Non-U.S. Unitholders gain from the sale or other disposition of its LP Units may be treated as effectively connected with a
unitholders indirect U.S. trade or business constituted by its investment in us.
Moreover, under the Foreign Investment in Real
Property Tax Act, as long as our LP Units continue to be regularly traded on an established securities market, a Non-U.S. Unitholder generally will only be subject to federal income tax upon the sale or disposition of a unit if at any time during
the shorter of the five-year period ending on the date of the disposition or the Non-U.S. Unitholders holding period for the unit (i) such Non-U.S. Unitholder owned (directly, indirectly or constructively applying certain attribution
rules) more than 5% of our LP Units and (ii) 50% or more of the fair market value of our real property interests and other assets used or held for use in a trade or business consisted of U.S. real property interests (which include U.S. real
estate, including land, improvements and associated personal property, and interests in certain entities holding U.S. real estate). If our LP Units were not considered to be regularly traded on an established securities market, such Non-U.S.
Unitholder (regardless of the percentage of LP Units owned) would be subject to U.S. federal income tax on a taxable disposition of our LP Units, and a 15% withholding tax would apply to the gross proceeds from such disposition (as described in the
preceding paragraph). More than 50% of our assets may consist of U.S. real property interests. Therefore, each Non-U.S. Unitholder may be subject to federal income tax on gain from the sale or disposition of its LP Units.
31
Administrative Matters
Information Returns and Audit Procedures
We intend to furnish to each unitholder, within 90 days after the close of each taxable year, specific tax information, including a
Schedule K-1,
which describes its share of our income, gain, loss and deduction for our preceding taxable year. In preparing this information, which will not be reviewed by counsel, we will take various
accounting and reporting positions, some of which have been mentioned earlier, to determine each unitholders share of income, gain, loss and deduction. We cannot assure our unitholders that those positions will yield a result that conforms to
all of the requirements of the Code, Treasury Regulations or administrative interpretations of the IRS.
The IRS may audit our federal
income tax information returns. Neither we nor Vinson & Elkins L.L.P. can assure prospective unitholders that the IRS will not successfully challenge the positions we adopt, and such a challenge could adversely affect the value of our LP
Units. Adjustments resulting from an IRS audit may require each unitholder to adjust a prior years tax liability, and may result in an audit of the unitholders own return. Any audit of a unitholders return could result in
adjustments unrelated to our returns.
Publicly-traded partnerships are treated as entities separate from their owners for purposes of
federal income tax audits, judicial review of administrative adjustments by the IRS and tax settlement proceedings. The tax treatment of partnership items of income, gain, loss and deduction are determined in a partnership proceeding rather than in
separate proceedings for each of the partners. For taxable years beginning prior to January 1, 2018, the Code requires that one partner be designated as the Tax Matters Partner for these purposes, and our partnership agreement
designates our general partner as our Tax Matters Partner.
The Tax Matters Partner can extend the statute of limitations for assessment
of tax deficiencies against unitholders for items in our tax returns. The Tax Matters Partner may bind a unitholder with less than a 1% profits interest in us to a settlement with the IRS unless that unitholder elects, by filing a statement with the
IRS, not to give that authority to the Tax Matters Partner. The Tax Matters Partner may seek judicial review, by which all the unitholders are bound, of a final partnership administrative adjustment and, if the Tax Matters Partner fails to seek
judicial review, judicial review may be sought by any unitholder having at least a 1% interest in profits or by any group of unitholders having in the aggregate at least a 5% interest in profits. However, only one action for judicial review may go
forward, and each unitholder with an interest in the outcome may participate in that action.
A unitholder must file a statement with the
IRS identifying the treatment of any item on its federal income tax return that is not consistent with the treatment of the item on our return. Intentional or negligent disregard of this consistency requirement may subject a unitholder to
substantial penalties.
Pursuant to the Bipartisan Budget Act of 2015, for taxable years beginning after December 31, 2017, if the
IRS makes audit adjustments to our income tax returns, it may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustment directly from us, unless we elect to have our general partner,
unitholders and former unitholders take any audit adjustment into account in accordance with their interests in us during the taxable year under audit. Similarly, for such taxable years, if the IRS makes audit adjustments to income tax returns filed
by an entity in which we are a member or partner, it may assess and collect any taxes (including penalties and interest) resulting from such audit adjustment directly from such entity.
Generally, we expect to elect to have our general partner, unitholders and former unitholders take any such audit adjustment into account in
accordance with their interests in us during the taxable year under audit, but there can be no assurance that such election will be effective in all circumstances. With respect to audit adjustments as to an entity in which we are a member or
partner, the Joint Committee of Taxation has stated that we would not be able to have our general partner, unitholders and former unitholders take such audit adjustment into account. If we are unable to have our general partner, unitholders and
former unitholders take such audit
32
adjustment into account in accordance with their interests in us during the taxable year under audit, our then current unitholders may bear some or all of the tax liability resulting from such
audit adjustment, even if such unitholders did not own our units during the taxable year under audit. If, as a result of any such audit adjustment, we are required to make payments of taxes, penalties or interest, our cash available for distribution
to our unitholders might be substantially reduced. These rules are not applicable for taxable years beginning on or prior to December 31, 2017. Congress has proposed changes to the Bipartisan Budget Act, and we anticipate that amendments may be
made. Accordingly, the manner in which these rules may apply to us in the future is uncertain.
Additionally, pursuant to the Bipartisan
Budget Act of 2015, the Code will no longer require that we designate a Tax Matters Partner. Instead, for taxable years beginning after December 31, 2017, we will be required to designate a partner, or other person, with a substantial presence
in the United States as the partnership representative (Partnership Representative). The Partnership Representative will have the sole authority to act on our behalf for purposes of, among other things, federal income tax audits and
judicial review of administrative adjustments by the IRS. If we do not make such a designation, the IRS can select any person as the Partnership Representative. We currently anticipate that we will designate our general partner as the
Partnership Representative. Further, any actions taken by us or by the Partnership Representative on our behalf with respect to, among other things, federal income tax audits and judicial review of administrative adjustments by the IRS, will be
binding on us and all of our unitholders.
Additional Withholding Requirements
Withholding taxes may apply to certain types of payments made to foreign financial institutions (as specially defined in the Code)
and certain other non-U.S. entities. Specifically, a 30% withholding tax may be imposed on interest, dividends and other fixed or determinable annual or periodic gains, profits and income from sources within the United States (FDAP
Income), or gross proceeds from the sale or other disposition of any property of a type which can produce interest or dividends from sources within the United States (Gross Proceeds) paid to a foreign financial institution or to a
non-financial foreign entity (as specially defined in the Code), unless (i) the foreign financial institution undertakes certain diligence and reporting, (ii) the non-financial foreign entity either certifies it does not have
any substantial U.S. owners or furnishes identifying information regarding each substantial U.S. owner or (iii) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the
payee is a foreign financial institution and is subject to the diligence and reporting requirements in clause (i) above, it must enter into an agreement with the U.S. Department of the Treasury requiring, among other things, that it undertake
to identify accounts held by certain U.S. persons or U.S.-owned foreign entities, annually report certain information about such accounts, and withhold 30% on payments to noncompliant foreign financial institutions and certain other account holders.
Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing these requirements may be subject to different rules.
Generally these rules apply to current payments of FDAP Income and will apply to payments of relevant Gross Proceeds made on or after
January 1, 2019. Thus, to the extent we have FDAP Income or we have Gross Proceeds on or after January 1, 2019 that are not treated as effectively connected with a U.S. trade or business (please read Tax-Exempt Organizations
and Other Investors), a unitholder that is a foreign financial institution or certain other non-U.S. entity, or a person that holds its LP Units through such foreign entities, may be subject to withholding on distributions they receive from
us, or its distributive share of our income, pursuant to the rules described above.
Each prospective unitholder should consult its own
tax advisors regarding the potential application of these withholding provisions to its investment in our LP Units.
33
Nominee Reporting
Persons who hold an interest in us as a nominee for another person are required to furnish to us:
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the name, address and taxpayer identification number of the beneficial owner and the nominee;
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a statement regarding whether the beneficial owner is:
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a non-U.S. government, an international organization or any wholly-owned agency or instrumentality of either of the foregoing; or
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the amount and description of LP Units held, acquired or transferred for the beneficial owner; and
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specific information including the dates of acquisitions and transfers, means of acquisitions and transfers, and acquisition cost for purchases, as well as the amount of net proceeds from sales.
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Each broker and financial institution is required to furnish additional information, including whether such broker or financial institution is
a U.S. person and specific information on any LP Units such broker or financial institution acquires, holds or transfers for its own account. A penalty of $250 per failure, up to a maximum of $3 million per calendar year, is imposed by the Code
for failure to report that information to us. The nominee is required to supply the beneficial owner of our LP Units with the information furnished to us.
Accuracy-Related Penalties
Certain penalties may be imposed as a result of an underpayment of tax that is attributable to one or more specified causes, including
negligence or disregard of rules or regulations, substantial understatements of income tax and substantial valuation misstatements. No penalty will be imposed, however, for any portion of an underpayment if it is shown that there was a reasonable
cause for the underpayment of that portion and that the taxpayer acted in good faith regarding the underpayment of that portion. We do not anticipate that any accuracy-related penalties will be assessed against us.
State, Local and Other Tax Considerations
In addition to federal income taxes, unitholders may be subject to other taxes, including state and local income taxes, unincorporated business
taxes and estate, inheritance or intangibles taxes that may be imposed by the various jurisdictions in which we conduct business or own property now or in the future or in which the unitholder is a resident. We conduct business or own property in
many states in the United States. Some of these states may impose an income tax on individuals, corporations and other entities. The Partnership also owns property and conducts business in Puerto Rico, St. Lucia and Grand Bahama. Under current
law, unitholders are not required to file a tax return or pay taxes in Puerto Rico, St. Lucia or Grand Bahama. We may own property or do business in other states or foreign jurisdictions in the future that impose income or similar taxes on
nonresident individuals. As we make acquisitions or expand our business, we may own property or conduct business in additional states or jurisdictions that impose a personal income tax. Although an analysis of those various taxes is not presented
here, each prospective unitholder should consider the potential impact of such taxes on its investment in us.
A unitholder may be
required to file income tax returns and pay income taxes in some or all of the jurisdictions in which we do business or own property, though such unitholder may not be required to file a return and pay taxes in certain jurisdictions because its
income from such jurisdictions falls below the jurisdictions filing and payment requirement. Further, a unitholder may be subject to penalties for a failure to comply with any filing or payment requirement applicable to such unitholder. Some
of the jurisdictions may require us, or we may elect, to withhold a percentage of income from amounts to be distributed to a unitholder
34
who is not a resident of the jurisdiction. Withholding, the amount of which may be greater or less than a particular unitholders income tax liability to the jurisdiction, generally does not
relieve a nonresident unitholder from the obligation to file an income tax return.
It is the responsibility of each unitholder to
investigate the legal and tax consequences, under the laws of pertinent jurisdictions, of its investment in us. We strongly recommend that each prospective unitholder consult, and depend upon, its own tax counsel or other advisor with regard to
those matters. Further, it is the responsibility of each unitholder to file all state, local and non-U.S., as well as federal tax returns that may be required of it. Vinson & Elkins L.L.P. has not rendered an opinion on the state, local,
alternative minimum tax or non-U.S. tax consequences of an investment in us.
35
LEGAL MATTERS
In connection with particular offerings of the securities in the future, and if stated in the applicable prospectus supplement, the validity
of those securities may be passed upon by Vinson & Elkins L.L.P., Houston, Texas, as our counsel, and for any underwriters or agents by counsel named in the applicable prospectus supplement.
EXPERTS
The consolidated financial statements, incorporated in this Prospectus by reference from the Buckeye Partners, L.P. Annual Report on
Form 10-K,
and the effectiveness of Buckeye Partners, L.P. and subsidiaries internal control over financial reporting have been audited by Deloitte & Touche LLP, an independent registered public
accounting firm, as stated in their reports which are incorporated herein by reference. Such consolidated financial statements have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting
and auditing.
36
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth all expenses payable by Buckeye Partners, L.P. in connection with the issuance and distribution of the
securities. All the amounts shown are estimates.
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Registration fee
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$
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124,500
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Printing expenses
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$
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20,000
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Fees and expenses of legal counsel
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$
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100,000
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Accounting fees and expenses
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$
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40,000
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Listing Fees
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$
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10,000
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Miscellaneous
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$
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Total
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$
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294,500
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Item 15. Indemnification of Directors and Officers.
The section of the prospectus entitled The Partnership AgreementIndemnification is incorporated herein by this reference.
Subject to any terms, conditions or restrictions set forth in the partnership agreement, Section 17-108 of the Delaware Revised Uniform Limited Partnership Act empowers a Delaware limited partnership to indemnify and hold harmless any partner
or other person from and against all claims and demands whatsoever.
Item 16. Exhibits.
(a) The following documents are filed as exhibits to this Registration Statement.
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1.1*
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Form of Underwriting Agreement.
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2.1
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Share Purchase Agreement, dated as of October
24, 2016, by and between VIP terminals Finance B.V. and Buckeye Partners, L.P. (Incorporated by reference to Exhibit 2.1 of Buckeye Partners, L.P.s Current Report on
Form
8-K
filed on October 24, 2016).
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3.1
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Amended and Restated Agreement of Limited Partnership of Buckeye Partners, L.P., dated as of November
19, 2010 (Incorporated by reference to Exhibit 3.1 of Buckeye Partners, L.P.s Current Report on
Form 8-K
filed on November 22, 2010).
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3.2
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Amendment No.
1 to the Amended and Restated Agreement of Limited Partnership of Buckeye Partners, L.P., dated as of January 18, 2011 (Incorporated by reference to Exhibit 3.1 of Buckeye Partners, L.P.s Current Report on
Form 8-K
filed on January 20, 2011).
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3.3
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Amendment No. 2 to Amended and Restated Agreement of Limited Partnership of Buckeye Partners, L.P., dated as of February
21, 2013 (Incorporated by reference to Exhibit 3.1 of Buckeye Partners, L.P.s Current Report on
Form 8-K
filed on February 25, 2013).
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3.4
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Amendment No.
3 to Amended and Restated Agreement of Limited Partnership of Buckeye Partners, L.P., dated as of October 1, 2013, (Incorporated by reference to Exhibit
3.1 of Buckeye Partners, L.P.s Current Report on
Form 8-K
filed on October 7, 2013).
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3.5
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Amendment No.
4 to Amended and Restated Agreement of Limited Partnership of Buckeye Partners, L.P., dated as of September 29, 2014 (Incorporated by reference to Exhibit
3.1 of Buckeye Partners, L.P.s Current Report on
Form 8-K
filed on September 29, 2014).
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5.1
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Opinion of Vinson & Elkins L.L.P. as to the legality of the securities being registered.
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II-1
*
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To be filed by amendment or as an exhibit to a current report on
Form 8-K
of the registrant.
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Item 17. Undertakings.
The
undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the
registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the
Calculation of Registration Fee table in the effective registration statement; and
(iii) To include any
material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided, however,
that paragraphs (i), (ii) and (iii) above do not apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration
statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the
purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i) If the registrant is relying on
Rule 430B:
(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the
registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement
in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and
included in the registration statement as of
II-2
the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided
in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement
to which the prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;
provided
,
however
, that no statement made in a registration statement or prospectus that is
part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of
sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or
(ii) If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as
of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5)
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the
undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed
pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing
prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrants annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plans annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
II-3
indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3
and has duly caused this Registration Statement on
Form S-3
to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Houston, State of Texas, on the 6th day of December, 2017.
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BUCKEYE PARTNERS, L.P.
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By:
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BUCKEYE GP LLC,
its general
partner
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By:
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/s/ Keith E. St.Clair
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Keith E. St.Clair
Executive Vice President and Chief Financial Officer
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POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints Keith E. St.Clair and Todd J. Russo and each of them, any
of whom may act without the joinder of the other, as his lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for him or her in any and all capacities, to sign any or all amendments or post-effective amendments to
this registration statement, or any registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with exhibits hereto and other
documents in connection therewith or in connection with the registration of the securities under the Securities Act of 1933, as amended, with the Securities and Exchange Commission, granting unto such attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that such attorneys-in-fact and agents or his substitutes may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement on
Form S-3
has been signed below by the following persons in the capacities indicated on the 6th day of December, 2017.
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Name
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Title
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/s/ Clark C. Smith
Clark C. Smith
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Chairman of the Board, President and
Chief Executive Officer of Buckeye GP LLC,
the general partner of Buckeye Partners, L.P.
(principal executive officer)
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/s/ Keith E. St.Clair
Keith E. St.Clair
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Executive Vice President and Chief Financial
Officer of Buckeye GP LLC,
the general partner of Buckeye Partners, L.P.
(principal financial officer)
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/s/ Gary L. Bohnsack
Gary L. Bohnsack
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Vice President, Controller and Chief Accounting Officer of Buckeye GP
LLC,
the general partner of Buckeye Partners, L.P.
(principal accounting officer)
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II-5
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Name
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Title
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/s/ Pieter Bakker
Pieter Bakker
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Director of Buckeye GP LLC,
the general partner of Buckeye Partners, L.P.
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/s/ Barbara M. Baumann
Barbara M. Baumann
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Director of Buckeye GP LLC,
the general partner of Buckeye Partners, L.P.
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/s/ Barbara J. Duganier
Barbara J. Duganier
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Director of Buckeye GP LLC,
the general partner of Buckeye Partners, L.P.
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/s/ Joseph A. LaSala, Jr.
Joseph A. LaSala, Jr.
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Director of Buckeye GP LLC,
the general partner of Buckeye Partners, L.P.
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/s/ Mark C. McKinley
Mark C. McKinley
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Director of Buckeye GP LLC,
the general partner of Buckeye Partners, L.P.
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/s/ Larry C. Payne
Larry C. Payne
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Director of Buckeye GP LLC,
the general partner of Buckeye Partners, L.P.
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/s/ Oliver G. Richard, III
Oliver G. Richard, III
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Director of Buckeye GP LLC,
the general partner of Buckeye Partners, L.P.
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/s/ Frank S. Sowinski
Frank S. Sowinski
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Director of Buckeye GP LLC,
the general partner of Buckeye Partners, L.P.
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/s/ Martin A. White
Martin A. White
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Director of Buckeye GP LLC,
the general partner of Buckeye Partners, L.P.
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II-6
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